Almost every country competes to promote its tourism destinations, including Indonesia. Foreign funds from foreign tourists are indeed important in boosting foreign exchange reserves. Various regulations were made as easy as possible to attract them, including in the electronic payment system.
For this reason, Bank Indonesia will work with the central banks of Singapore and Thailand on digital payment systems by implementing a standardized Quick Response Code (QR code). The implementation is expected to begin in the second half of 2019.
QR code is the evolution of barcode from one to two dimensions. This code has the ability to store larger data than a barcode. BI and a number of researchers predict this cooperation will increase foreign tourist visits to Indonesia as it makes them more comfortable in making transactions without having to download new payment apps.
This step is important especially when looking at the Bank Indonesia report last Friday (5/10) related to the current account deficit. In fact, the deficit in the first quarter of this year was US$ 7 billion, lower than US$ 9.2 billion in the previous quarter.
However, the service account deficit - one of its components – rose due to a decrease in the surplus of travel services. This is in line with the decline in the number of foreign tourist visits, which follows the seasonal pattern.
Therefore, the collaboration of the three central banks could become new ammunition to attract foreign tourists to flock to Indonesia. The reason is that Singapore is a hub for travelers from other countries. “For tourist transits, one of them is through Singapore. It’s because there are many direct flights to tourism destinations,” Institute for Development of Economics and Finance (Indef) Economist BhimaYudhistira told Katadata.co.id on Wednesday (5/8).
Last Friday, Transportation Minister Budi Karya Sumadi met with Tourism Minister Arief Yahya to discuss efforts to increase tourist visits to Indonesia. “How can we move the passengers in Thailand, Malaysia and Singapore to Indonesia? We will create and encourage flights to seize the chance,” the minister said.
So far, the Statistics Indonesia (BPS) noted that tourist arrivals from Singapore to Indonesia were the second highest in ASEAN. Singapore tourists visiting Indonesia reached 1.77 million in 2018, while the number of tourists from Thailand was 122.3 thousand.
Looking at the data, Bhima is optimistic that BI’s collaboration with the central banks of Singapore and Thailand will be able to increase tourist visits to Indonesia. “If access to digital payments is made easier, of course, foreign tourists don’t have to bother downloading payment apps,” he said.
However, he noted that tourists from Singapore are concentrated at several points in Indonesia, such as Batam, Jakarta, and Bali. For this reason, financial technology (fintech) firms need to increase their payment services in the three regions, especially in shopping centers.
Nonetheless, he could not estimate the increase in tourist visits due to this collaboration. However, the PricewaterhouseCoopers (PwC) survey at the beginning of 2019 showed that 24 percent of 21,480 respondents in 27 countries were shopping via smartphone every week.
Not only for online shopping, smartphone payment services at physical stores are also growing rapidly in ASEAN. The highest growth in smartphone payment services occurred in Vietnam, which rose 24 percent to 61 percent earlier this year.
Payments through smartphone are not only for shopping, but also for payment of parking tickets, donations, transportation, and bills. However, BPS Head Suhariyanto did not explain in detail whether BI’s steps to standardize QR code by collaborating with Singapore and Thailand could increase tourist visits. “It's worth trying,” he said.
Although there has been no in-depth study on this matter, the implementation in Thailand can be used a reference. Thailand managed to attract many tourists from China after providing payment facilities through smartphone.
The ASEAN Post reported that tourist arrivals from China for the first time reached 10 million in a year in 2018. As a result, traders in Thailand were busy providing WeChat Pay and Alipay. Chinese citizens mostly use these two payment services.